1. Medical Device Industry 2010 and Beyond….. Venkat Rajan Dec, 16 th 2009 2. 2009 Recession Rebound? 2000-2009 Medical Device Decade Retrospective HC Reform: As it stands now 2010 Growth Sectors Challenges Ahead Decade Ahead 2010-2020 Trends Focus Points 3. Recession Impacts Medical Device Market 2009 Recession Imact Cap Ex Spending Destocking/ Inventory Management HC Reform Looming Investment Spending Internal Resources Patient Volumes 4. Medical Device Industry Decade Retrospective 2000-2009 Major Technology Developments 2000-2009 Minimally Invasive Surgery Improves Treatment times, Recovery, Reduces Risk Drug Device Hybrid Technologies Microprocessors make devices faster, smarter, efficient. Increased Specialization Expands Availability of Treatments. National Health Expenditures Sky Rocket (~$2.5 Trillion in 2009) Imaging- Detection Improvement Increase confidence Robotics become Reality ? CAGR: 7.18% CAGR:6.49% 5. Health Care Reform Impact – Medical Device Tax Medical Device Tax Proposals House Tax Proposal Medical Device Tax: 2.5 percent tax on the sale of any medical device product not sold directly to the public or to be used in further manufacturing of other products Senate Tax Proposal Medical Device Tax: A fee of $2 billion to be paid for by the industry on an annual basis; the share of how much each company pays is to be determined by their overall share of FDA Class II and Class III product sales in the U.S. Excludes Class II devices retail less than $100. 0 percent of sales up to $5 million; 50 percent of sales over $5 million and up to $25 million; 100 percent of sales over $25 million. Lowered from $4B . Amendment submitted Dec 14th: Companies reporting less than $100 million in yearly revenues would be exempt from the tax. Companies reporting between $100 million and $150 million would pay an excise tax on 50 percent of their revenues; the rate for companies with more than $150 million in annual sales would be 100 percent. Make the excise tax tax-deductible. Move effective date to 2013 HC Reform Market Opportunity Expansion of Coverage Reduce number of Uninsured Treatments Safety Net in Economic Down Turn Electronic HC Records National Pricing Clarity Wellness Care Products Preventative Care Products/Technologies Earlier Detection of Chronic Diseases Market Threats Reduced Capital for R&D; spending Marginal Benefit for Advanced Age Treatments Pricing Pressures Reimbursement Stagnation Restrain M&A; activity by larger companies Raise Costs for Elective/ Semi-Elective Treatments 6. Comparative Effectiveness Research- It’s Coming Comparative Effectiveness Research $1.1 B ($400M NIH, $300M AHRQ, $400M HHH) Impact Treatment Decision Making Criteria Faster Dissemination of Information Identify Ideal Patient Profiles Influence Adoption of New Technologies Stamdardization Theory vs. Application Implementation? Weight of Information? Compared against Internal Evluation Boards? How are parameters being defined? How are funds allocated? Sources of Information? 7. U.S. Medical Device Industry Market Sectors, 2009 Cardiology Orthopedics Neurology/Neurovascular Aesthetic Surgery 8. 2007 ? Cardiology 2008 ? 2009 ? 2010 ? 2011 ? 0 The Cardio market which has been slumping, but should get a boost in 2010 and beyond due to stabalizing of DES and ICD markets, and growth in AFib and Heart Valve Markets. Growth Opportunities in Top Segments/Sectors Surgery ? 0 The transition to MIS will likely lead to cannibalization of certain market segments. Patient demographic trends and improved image guidance, robotics, and minimally invasive endoscopic tools should support moderate growth. ? ? ? ? ? Woundcare ? ? ? 0 The Woundcare market is one that is mature and stable. Pricing pressures due to reprocessing, GPO’s, reimbursement, destocking have all restrained the market. New preventative technologies that reduce risk of adverse events represent targeted segments for growth. Could receive a boost from Comparative Effectiveness Research (CER). ? Despite slowed growth from double digit rates due to factors including patient volumes, regulatory scrutiny, and pricing pressures; new product developments that improve patient comfort, surgical procedure times, and patient demographics should fuel continued growth. ? Orthopedics ? ? ? 0 ? Source: Frost & Sullivan.

• published: 11 Jun 2015
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